Recently, online service marketplaces have become increasingly more common. Typically, these web sites serve as bulletin board systems to facilitate initial contacts between service buyers and service providers. In most cases, the online marketplaces' involvement ends here. In other words, most online service marketplaces play little, if any, role in monitoring the progress of the provision of the services or in facilitating payment from the buyer to the service provider.
For example, in the most basic case where the online service marketplace merely serves to facilitate the first contact between the buyer and the service provider, the buyer and the service provider are left to arrange the payment mechanics on their own. In the case where the buyer pays some or all of the cost up-front, the buyer runs the risk that an unscrupulous service provider may simply “take the money and run.” On the other hand, if the buyer and service provide arrange for payment to be made after the services are rendered, the service provider has no real assurance 1) that the buyer has sufficient funds to pay for the services and 2) that the buyer will in fact pay for services if the services are performed satisfactorily.
Those online service marketplaces that do facilitate payment between the buyer and the service provider still do not provide adequate safeguards to protect the interests of both the buyer and the service provider. In particular, these online service marketplaces, while perhaps providing a convenient means for transferring payment from the buyer to the service provider, still do not provide the service provider with assurance that the buyer can pay for the services and will pay for them once they are performed satisfactorily, while at the same time providing the buyer with adequate protection against “no-shows” and against shoddy work.